Loan request situations where the borrower owes more than the maximum available LTV for his situation and type of property can actually be the MOST profitable situation for a financial intermediary or mortgage broker. Because few people have the knowledge, contacts, and experience to complete this type of financing, “broker fee compression” is not an issue. And since the broker is adding tremendous value in a situation few are able to do, higher than usual fees are totally justified.
The key for the intermediary is to bring the deal to a very specialized lender.
A few brief examples of recent situations where we were able to put difficult deals together by using the discounted note purchase. All started as loan requests brought to us by mortgage brokers or other financial intermediaries.
Golf Course Indiana – Purchased existing $1.375 million note for $995,000.00, restructured note with interest-only payments held in interest reserve, borrower successfully refinanced us out after 12 months.
Restaurant/Bar Illinois – Owed $345,000 on first lien and $400,000 on SBA second…..property appraised at 480,000. Purchased first lined for $225,000 and SBA second for $50,000. After 2 years borrower sold to a local chain for $475K and was able to avoid personal guarantee liability for deficiency shortage.
Motel, Texas – 5 doctors silent partners, debt of $2,800,000 on property worth $1,600,000. Partners feared liability for $1,000,000 plus note deficiency and were tired of investing $200,000 annually to make up for operating losses. We purchased the note for $1,750,000 with the doctor partners contributing $250,000 for liability release. Within twelve months the owners were able to sell the hotel, but slightly below the principal amount we were owed. We accepted a small second mortgage for the difference.
Arizona Auto Collision Shop – Note Purchase $2.8 Million Principal Balance bought for $1.775 Million on- Mortgage Broker Received $100,000.00 Commission
We are experts in financing hard to finance deals (hard money, private money) through our mortgage fund, Private Mortgage Investors, LLC (PMF Partners). Feel free to contact us with any questions, or to run any hard money type loan scenario by us. You can go to our website, click on “Request a Loan Now” and fill out the online, interactive loan application. We are also experts in negotiating discounted payoffs and discounted note purchases with banks, as we also own a commercial debt negotiation company.